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TMI Blog2022 (10) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... eding and produce materials and documents like books of account, vouchers, invoices, etc. maintained in terms of statutory requirement before the Assessing Authority so as to rule out manipulation. Since the petitioner has already filed revised return for the Assessment Year 2018-19 in compliance of the terms of notice under Section 148, the Assessing Officer is required to verify the books of account of the relevant year and examine any other evidence adduced by the petitioner with reference to the materials available in record. While doing so, he will confront the adverse material, if any, he wishes to utilize against the assessee-petitioner and record a preliminary statement with regard to such verification. He may also record statement whether the alleged transactions are incorporated in the regular books of account/statements on the basis of which returns have already been filed. After such verification, if he comes to the conclusion that the petitioner is liable to be levied with tax, he shall allow the petitioner to take copy of such materials which he wants to utilize against the petitioner. Needless to say that the petitioner shall be allowed reasonable opportunity f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in accordance with the risk management strategy formulated by the Board with certain underlying information. From the information it is noted that, you have inflated your expenses by showing bogus purchase from M/s. Mideast Integrated Steel Pvt. Ltd. and suppressed income amounting to Rs.31,64,58,088/- during the Financial Year 2017-18, which needed to be added back to your total income for the Assessment Year 2018-19. Accordingly, a show cause notice was sent to the assessee under clause (b) of Section 148A of the Income-tax Act, 1961 for assessee s response with supporting documents (if any) on the above mentioned issues electronically in e-proceeding facility through his account in e-filing portal on or before 22.03.2022. Prior approval of the PCIT-1, Bhubaneswar was obtained before issuance of show cause notice on date 12.03.2022. The assessee has not complied with the show cause notice on or before due date which means assessee has nothing to say in this regard. In view of the above, I have reasons to believe that income chargeable to tax has escaped assessment to the extent of Rs.31,64,58,088/- within the meaning of Section 147 of the Income-tax Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent under Section 148. 4.1. If the grounds are relevant and have a nexus with the formation of opinion regarding escaped assessment, the Assessing Authority would be clothed with jurisdiction to take action under Section 148 of the IT Act. Whether the grounds are adequate or not is not a matter which would be gone into by the High Court, for the sufficiency of the grounds which induced the Assessing Authority to act is not a justiciable issue. What can be challenged is the existence of the belief but not the sufficiency or reasons for the belief. It is submitted that non-response of the assessee to the notice dated 15.03.2022 under Section 148A speaks volumes about the conduct of the petitioner-company. Amplifying such submission, it is said that the details of material based on which the action under Section 148 has been initiated was made known to the petitioner, which it itself has enclosed to the writ petition at Annexure-4. Said Annexure contains Case Related Information Detail which inter alia shows as follows: S.No. Source PAN Source PAN Name Information FY Information Type ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any, in response to the show-cause notice referred to in clause (b); (d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires: Provided that the provisions of this section shall not apply in a case where,- (a) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of the assessee on or after the 1st day of April, 2021; or (b) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any money, bullion, jewellery or other valuable article or thing, seized in a search under section 132 or requisitioned under section 132A, in the case of any other person on or after the 1st day of April, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d narrowly. It comprehends not only variety of factors including information from external sources of any kind but also the discovery of new facts or information available in the record of assessment not previously noticed or investigated. Suppose a mistake in the original order of assessment is not discovered by the Assessing Officer, on further scrutiny, if it came to the notice of another assessor or even by a subordinate or a superior officer, it would be considered as information disclosed to the incumbent officer. If the mistake itself is not extraneous to the record and the informant gathered the information from the record, the immediate source of information to the Officer in such circumstances is in one sense extraneous to the record. It will be information in his possession within the meaning of Section 19 of the State Act. In such cases of obvious mistakes apparent on the face of the record of assessment, that record itself can be a source of information, if that information leads to a discovery or belief that there has been an escape of assessment or under- assessment or wrong assessment. 22. There are a catena of judgments of this Court holding that assessment pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and circumstances exist. The courts will not readily defer to the conclusiveness of the authority s opinion as to the existence of matter of law or fact upon which the validity of the exercise of the power is predicated. The doctrine of reasonableness thus may be invoked. Where there are no reasonable grounds for the formation of the authority s opinion, judicial review in such a case is permissible. When we say that where the circumstances or material or state of affairs does not at all exist to form an opinion and the action based on such opinion can be quashed by the courts, we mean that in effect there is no evidence whatsoever to form or support the opinion. The distinction between insufficiency or inadequacy of evidence and no evidence must, of course, be borne in mind. A finding based on no evidence as opposed to a finding which is merely against the weight of the evidence is an abuse of the power which courts naturally are loath to tolerate. Whether or not there is evidence to support a particular decision has always been considered as a question of law. It is in such a case that it is said that the authority would be deemed to have not applied its mind or it did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pandey Vrs. Union of India, 2022 SCC OnLine SC 881. 5.6. Proceeding is frequently used to denote a step in an action and obviously it has that meaning in such phrases as proceeding in any cause or matter. When used alone, however, it is in certain statutes to be construed as synonymous with or including action. Reference may be had to Halsbury s Laws of England, Vol. 1, 3rd Edition, page 6. 5.7. The term proceeding is a very comprehensive term and generally speaking means a prescribed course of action for enforcing a legal right. It is not a technical expression with a definite meaning attached to it, but one the ambit of whose meaning will be governed by the statute. It indicates a prescribed mode in which judicial business is conducted. Refer: Babu Lal Vrs. Hazari Lal Kishori Lal, AIR 1982 SC 818 = (1982) 1 SCC 525. 5.8. In Commander Coast Guard Region (East) Vrs. O. Konavalov, MANU/TN/0029/2001 = (2001)1MLJ420 = O.S.A. No. 309 350 of 2000, decided on 10.01.2001 by Madras High Court = 2001 SCC OnLine Mad 28 = (2001) 1 CTC 247 = (2001) 1 Mad LJ 420 it is laid down that the word Proceeding has not been defined in the General Clauses Act, 1897. Oxford ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.10. In P.L. Kantha Rao Vrs. State of AP, AIR 1995 SC 807 = (1995) 2 SCC 471, it is stated that the word proceeding would depend upon the scope of the enactment wherein the expression is used with reference to a particular context where it occurs. It may mean a course of action for enforcing legal right. In the journey of litigation, there are several stages, one of which is the realisation of the judicial adjudication which attained finality. 5.11. The expression proceeding is not a term of art, which has acquired a definite meaning. What its meaning is when it occurs in a particular statute or a provision of a statute will have to be ascertained by looking at the relevant statute. Bearing in milnd that the term proceeding indicates something in which, business is conducted according to a prescribed mode it would be only right to give it a comprehensive meaning so as to include within it all matters coming up for judicial adjudication and not to confine it to a civil proceeding alone. Vide : Ram Chandra Aggarwal Another Vrs. State of Uttar Pradesh Another, 1966 Supp. SCR 393 = AIR 1966 SC 1888. 5.12. The term proceeding is a very comprehensive term and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suo motu, within a period of one year from the date on which the contempt is alleged to have been committed. 5.16. In Kishan Lal Co. Vrs. Additional Commissioner of Commercial Tax, (2017) 102 VST 343 (Chhatisgarh) = 2017 SCC OnLine Chh 584 the initiation of proceeding has been described. The word initiate or initiation has not been defined in the Act. Since it has not been defined in the Act, it would be appropriate to refer to the dictionary meaning of the word initiate . In Webster s Third New International Dictionary, the word initiate has been defined as to begin or set going; make a beginning of; perform or facilitate the first actions, steps or stages of. Likewise, in Shorter Oxford English Dictionary, the word initiate has been defined as to begin, commence, enter upon; to introduce, set going, originate. Black s Law Dictionary, 6th Edition, defines the words initiate and initiative as: Initiate: commence; start; originate; introduce; inchoate. Thus, the word initiation of suo motu revision as stated in proviso (a) to Section 9(3) of the Chhatisgarh Value Added Tax Act, 2005, has a definite connotation. Initiation of revisional proceeding is the time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t point of time. 5.18. Looking the present case in the above perspective, it can be candidly said that in absence of rebuttal to the contents and material particulars supplied to the assessee by specifically mentioning that expenses have been inflated by making bogus purchases from M/s. Mideast Integrated Steel Pvt. Ltd., thereby suppressing income to the tune of Rs.31,64,58,088/- pertaining to Financial Year 2017-18 in the notice dated 15.03.2022, neither the Order dated 26th March, 2022 passed under clause (d) of Section 148A can be faulted with nor does the issue of notice under Section 148 suffer from any infirmity in law. The fact that the petitioner after receipt of the Order dated 26.03.2022 passed under Section 148A and the notice dated 26.03.2022 issued by initiating proceeding for assessment under Section 148, furnished revised return for the Assessment Year 2018-19 on 23.04.2022 in response thereto, leads to construe that the petitioner was conscious about material based on which the reassessment proceeding is stated to have been initiated under Section 148. Therefore, the contention of the petitioner that it was unaware of the evidence based on which the proceeding f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Act, 1961. The notices have been issued, after considering the objections raised by the petitioner. If the petitioner has any grievance on merits thereafter, the same has to be agitated before the Assessing Officer in the re-assessment proceedings. Under the circumstances, the High Court has rightly dismissed the writ petition. No interference of this Court is called for. The present Special Leave Petition stands dismissed. Pending applications stand disposed of. 5.21. It is seen that in the case of Anshul (supra) the grievance of the petitioner was that his objection raised against notice under Section 148A was not taken care of. Yet, the Hon ble Supreme Court did not interfere with the order of dismissal of writ petition by the High Court of Punjab Haryana. Nonetheless, in the instant case, the petitioner has not furnished objection to the notice dated 15.03.2022 issued under Section 148A of the IT Act. Therefore, this Court finds that no case is made out by the petitioner for interfering with the issue of notice under Section 148 by the Adjudicating Authority after taking decision to initiate proceeding on passing order under Section 148A(d) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if any particular material is used against an assessee then the assessee must be given full opportunity to rebut any adverse inference that could be drawn from user of that particular material. This was fully discussed by us in 26 (1970) S.T.C. 22 (Muralimohan Prabhudaval v. State of Orissa) wherein a question arose as to whether the assessee could be given opportunity for cross- examination with reference to account books of third parties used against the assessee. In paragraph 5 of our Judgment we referred to the fourth proposition as follows: In case he proposes to use against the assessee the result of any private enquiries made by him, he must communicate to the assessee the substance of the information so proposed to be utilized to such extent as to put the assessee in possession of full particulars of the case he is expected to meet and should further give him ample opportunity to meet it, if possible. 15. Needless to say that an assessing authority is entitled to collect the materials behind the back of the assessee. It is not necessary that all the materials so collected by the assessing authority need be confronted to the assessee. Only those materials which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the part of the report containing allegation against the dealer and the materials on the basis of which such allegation has been made must have to be disclosed to the dealer for his rebuttal, if the assessing officer wants to utilize the same against the dealer. *** 21. The Hon ble Apex Court in GKN Driveshafts (India) Ltd. Vrs. Income-tax Officer, (2003) 259 ITR 19 held that when a notice under Section 148 of the Income Tax Act is issued, the proper course of action for the notice is to file a return and, if he so desires, to seek reasons for issuing notices. The assessing officer is bound to furnish the reasons within a reasonable time. 22. Therefore, it cannot be said that the assessing officer has committed any error in insisting upon production of books of account before issuing the certified copy of the seized materials. Production of books of account prior to issuance of certified copy of the seized materials is necessary to rule out the possibility of preparation of accounts in line with the seized documents. This has become further necessary in this case as at no stage books of account were produced earlier at the time of inspection or before t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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